On September 5, 2016, New Jersey Governor Chris Christie announced that, effective 1/1/2017, New Jersey is unilaterally terminating the state’s reciprocity agreement with Pennsylvania. Accordingly, Pennsylvania residents who are employed in New Jersey will need to have New Jersey taxes withheld from their wages and will need to file New Jersey tax returns. Also, New Jersey residents who are employed in Pennsylvania will start to have Pennsylvania income tax withheld.

Governor Christie did state that he would reconsider his decision if the New Jersey Legislature can find sufficient tax revenues or cost savings to close the state’s budget gap.

If you are a resident of either Pennsylvania or New Jersey and have questions regarding this new legislation please contact us at 302.225.0600 or info@belfint.com.